When you’re looking at CRM pricing, which is generally stated on a person per month basis, it’s easy to underestimate the long-term cost of a system. £70 per user per month might not sound that much, but over the life of the system it’s going to add up – £420,000 for a fifty-user system over 10 years to be precise. Hardly a trifling sum for the average customer.
So how do you keep CRM software costs under control? Here are ten ways that may allow you to radically reduce your software bill:
Buy software that’s appropriate to your needs – it’s easy to rush out and buy product X because someone else you know happens to be using it, but if your needs are pretty basic there’s no need to spend a fortune on capabilities you’re not going to use. Start out by documenting a detailed set of business and functional requirements for your system and use this as the basis for selecting the most appropriate technology for your needs. There are a lot of CRM technology options out there, and you may find you don’t need to the most expensive ones to achieve your objectives.
Make sure you understand what you’re signing up to – The headline ‘per user per month’ figure isn’t the only cost you may end up paying. A lot of CRM vendors have a range of ‘hidden’ costs, for example additional data storage charges if you go above certain thresholds. Make sure you understand what the potential additional costs are and whether you’re likely to incur them before you sign up.
Negotiate! – CRM software pricing isn’t quite as set in stone as it may seem, even for cloud-based solutions. Don’t be afraid to negotiate. It’s quite possible to very significantly reduce subscription costs just by being prepared to haggle.
Are you due a discount? – Many vendors offer preferential rates for certain categories of customer, for example, charities, not for profits, government, and educational institutes, so it’s worth checking what potential discounts might be available.
Don’t sign up until you need to – You’re going to spend a certain amount of time implementing the system, and during this time no one’s going to be using the system, so don’t sign up until you’re ready to go live.
Does everyone need to be on the system? – One of the traps I see people falling into is taking out subscriptions for too many people. There’s a tendency to be over-optimistic about who will end up using the system. It’s generally better to buy for the core users and add users as needed, than take out a licence for a hundred users and later find only twenty are using it.
Review, review, review – Review usage patterns regularly. Quarterly is a good basis. This will highlight people who aren’t using the system and allow you to cut back on system users if need be. It may be that usage proves to be so limited that it’s worth considering ending a subscription entirely, and perhaps moving users to a cheaper platform.
Monitor edition and licensing changes – Most cloud-based CRM software is available in a number of ‘editions’ such as standard, professional and enterprise. The functionality and cost of these editions tends to change over time, so it’s worth keeping a careful eye to see if there are opportunities to downgrade edition in order to reduce costs.
Keep an eye on third party apps – With the success of app marketplace’s such as Salesforce.com’s AppExchange it’s easy to purchase add-on applications for your CRM system, which makes it important to also keep an eye on their usage, cost and licensing, particularly as some may become redundant as the core CRM application develops over time.
Can CRM replace other systems? – The functional breadth and flexibility of many of the current generation of CRM systems means that the technology can be adapted to meet a wide range of needs. You may find there are existing systems that could be replaced by extending your current CRM system, allowing you to reduce overall IT costs.
By using the approaches described above, I believe the average user could lower their CRM software costs by over 30% a year, without impacting the value derived from the system. Using our 50 users over 10 years example from earlier, that’s a saving of at least £126,000. Not a bad return on a pretty modest investment of time!